INTRODUCTION



To obtain a more comprehensive understanding of our financial condition, changes
in financial condition, and results of operations, the following discussion and
analysis should be read in conjunction with our condensed consolidated financial
statements and the related notes included elsewhere in this Quarterly Report on
Form 10-Q, as well as our audited consolidated financial statements and the
related notes included in our Annual Report on Form 10-K for the year ended
December 31, 2021 (the "2021 Annual Report"), which was filed with the United
States ("U.S.") Securities and Exchange Commission (the "SEC") on March 1, 2022.

The following discussion and analysis contains forward-looking statements about
our business, operations, and financial performance based on current plans and
estimates that involve risks, uncertainties, and assumptions. Actual results
could differ materially from those discussed in these forward-looking
statements. Factors that could cause such differences are discussed in the
sections of this Quarterly Report on Form 10-Q titled "Cautionary Statements
Regarding Forward-Looking Statements" and Item 1A "Risk Factors."

Table of Contents



•  Overview and Basis of Presentation

•  Factors Affecting Operating Results

•  Key Performance Indicators

•  Results of Operations

•  Non-GAAP Measures

•  Liquidity and Capital Resources

•  Critical Accounting Estimates

•  Cautionary Statements Regarding Forward-Looking Statements

OVERVIEW AND BASIS OF PRESENTATION

Our Business

ADT Inc., together with its wholly-owned subsidiaries (collectively, the
"Company," "we," "our," "us," and "ADT"), is a leading provider of security,
interactive, and smart home solutions serving residential, small business, and
commercial customers in the U.S. Since the acquisition of Compass Solar Group,
LLC (now "ADT Solar") (the "ADT Solar Acquisition") in December 2021, we also
provide residential solar and energy storage solutions. We believe solar is a
logical extension of our offerings as it enhances our ability to deliver an
integrated safe, smart, and sustainable home experience.

Our mission is to empower people to protect and connect to what matters most -
their families, homes, and businesses - by delivering safe, smart, and
sustainable lifestyle-driven solutions through professionally installed,
do-it-yourself ("DIY"), and mobile or other digital-based offerings supported by
our 24/7 professional monitoring services.

We are building a strong platform for growth by focusing on improving customer
satisfaction and retention, increasing our recurring monthly revenue through
subscriber acquisition and the introduction of new products and services,
increasing the rate at which new subscribers opt for our interactive services,
and reducing our revenue payback period.

Basis of Presentation and Segments



All financial information presented in this section has been prepared in U.S.
dollars in accordance with generally accepted accounting principles in the
United States of America ("GAAP") and includes the accounts of ADT Inc. and its
wholly-owned subsidiaries. All intercompany transactions have been eliminated.
In addition, we use the equity method of accounting to account for our
investment in Canopy (as defined below) as we have the ability to exercise
significant influence but do not have control.

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We report financial and operating information in the following three segments:



•Consumer and Small Business - The Consumer and Small Business ("CSB") segment
primarily includes the sale, installation, servicing, and monitoring of
integrated security and automation systems and other related offerings to
residential homeowners, small business operators, and other individual
consumers, as well as general corporate costs and other income and expense items
not included in another segment.

•Commercial - The Commercial segment primarily includes the sale, installation,
servicing, and monitoring of integrated security and automation systems, fire
detection and suppression systems, and other related offerings to larger
businesses and/or multi-site operations, which often require more sophisticated
integrated solutions, as well as certain dedicated corporate and other costs.

•Solar - The Solar segment primarily includes the design and installation of
solar and related solutions and services to residential homeowners who purchase
solar and energy storage solutions, energy efficiency upgrades, and roofing
services, as well as certain dedicated corporate and other costs.

Our Chief Executive Officer, who is our chief operating decision maker (the
"CODM"), uses Adjusted EBITDA, which is considered the segment profit measure,
to evaluate segment performance. Our definition of Adjusted EBITDA, a
reconciliation of Adjusted EBITDA to net income (loss), and additional
information, including a description of the limitations relating to the use of
Adjusted EBITDA, are provided under "-Non-GAAP Measures."

Refer to Note 3 "Segment Information" for additional information.

COVID-19 Pandemic Update



During March 2020, the World Health Organization declared the outbreak of a
novel coronavirus as a pandemic (the "COVID-19 Pandemic"). While responses have
varied by individuals, businesses, and state and local governments, the COVID-19
Pandemic, including recent variants, caused certain notable impacts on general
economic conditions, including temporary and permanent closures of many
businesses, increased governmental regulations, supply chain disruptions, and
changes in consumer spending. To protect our employees and serve our customers,
we have implemented and are continuously monitoring and evolving certain
measures as necessary, such as (i) detailed protocols for infectious disease
safety for employees, (ii) employee daily wellness checks, and (iii) certain
work from home actions, including for the majority of our call center
professionals. Our response plan has not materially changed from that described
in the 2021 Annual Report, and we continue to provide relevant updates as
necessary.

We believe our overall recurring revenue and highly variable subscriber
acquisition cost model provides a solid financial foundation for strong cash
flow generation despite the impact from the COVID-19 Pandemic. We anticipate
maintaining sufficient liquidity and capital resources to continue (i) providing
essential services, (ii) satisfying our debt requirements, and (iii) having the
ability to return capital to our stockholders in the form of a regular quarterly
dividend during this challenging macroeconomic environment.

We continue to consider the on-going and pervasive economic impact of the
COVID-19 Pandemic in our assessment of our financial position, results of
operations, and cash flows, as well as certain accounting estimates as of and
for the periods presented. However, the evolving and uncertain nature of the
COVID-19 Pandemic, as well as any related economic or regulatory impacts, could
materially impact our estimates and financial results in future reporting
periods.

Hurricanes



During the third quarter of 2022, Hurricanes Fiona and Ian impacted certain
areas in which we operate and resulted in power outages and service disruptions
to certain of our customers. We will continue to monitor and do not anticipate
any material impacts from these hurricanes.

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FACTORS AFFECTING OPERATING RESULTS

The factors described herein could have a material adverse effect on our business, financial condition, results of operations, cash flows, and key performance indicators.



As of September 30, 2022, we served approximately 6.7 million security
monitoring service subscribers. Generally, a significant upfront investment is
required to acquire new subscribers that in turn provide ongoing and predictable
recurring revenue generated from our monitoring services and other
subscriber-based offerings. Although the economics of an installation may vary
depending on the customer type, acquisition channel, and product offering, we
generally achieve revenue break-even in less than two and a half years.

For our subscriber-based offerings, our results are impacted by the mix of
transactions under a Company-owned equipment model versus a customer-owned
equipment model (referred to as outright sales), as there are different
accounting treatments applicable to each model. As we continue to build our
partnership with Google LLC ("Google"), introduce new or enhance our current
offerings, and refine our go-to-market approach, we expect to see a shift toward
an increasing proportion of outright sales transactions, which will impact
results in future periods.

The overall demand for our products and services is driven by a number of
external factors such as the overall economic conditions in the geographies in
which we operate, the price and quality of our products and services compared to
those of our competitors, as well as changes in competition such as from the
acquisition or disposition of similar businesses by our competitors. Our ability
to add new customers and grow our businesses is also impacted by the following:

•Growth in our residential and small business customer base can be influenced by
the overall state of the housing market, the perceived threat of crime, the
occurrence of significant life events such as the birth of a child or opening of
a new business, or the availability of financial incentives such as those
provided by insurance carriers.

•Growth in our commercial customer base can be influenced by the rate at which new businesses begin operations or existing businesses grow, as well as applicable building codes and insurance policies.



•Growth in our solar customer base can be influenced by the availability of
certain rebates, tax credits, and other financial incentives, the availability
and cost of consumer financing options, and traditional energy prices and grid
reliability.

We believe advancements in technology, younger generations of consumers, and
shifts to de-urbanization have increased consumer interest in smart home
offerings and other mobile technology applications; and we have made significant
progress toward increasing the variety of our offerings to accommodate these
changing interests. In addition, we believe uncertainties around the economic
environment and the COVID-19 Pandemic have, in general, increased consumer and
business awareness of the need for security.

Advances in technology are also helping us to improve our products and services
and reduce our costs. For example, our innovative virtual service support
program (the "Virtual Assistance Program"), which launched for our residential
customers in July 2021, provides our customers the ability to troubleshoot and
resolve certain service issues through a live video stream with our skilled
technicians. This provides customers with more options for receiving certain
services that best fit their lifestyles while reducing the cost for us to
provide these services and lowering our carbon footprint by eliminating
thousands of vehicle trips each day.

We may experience an increase in costs associated with factors such as (i)
offering a wider variety of products and services; (ii) providing a greater mix
of interactive and smart home solutions; (iii) replacing or upgrading certain
system components due to technological advancements or otherwise; (iv) supply
chain disruptions; (v) inflationary pressures on costs such as materials, labor,
and fuel; and (vi) other changes in prices, interest rates, or terms from our
suppliers, vendors, or third-party lenders. Changes in interest rates or terms
from third-party lenders that provide loan products to our Solar customers are
impacted by factors such as the Federal Reserve increasing the risk-free
interest rate. Refer to Note 6 "Goodwill and Other Intangible Assets" and
Critical Accounting Estimates below for further discussion.

Attrition has a direct impact on our financial results, including revenue,
operating income, and cash flows. A portion of our recurring customer base can
be expected to cancel its service every year as customers may choose not to
renew or may terminate their contracts for a variety of reasons, including
relocation, cost, loss to competition, or service issues. Prior to 2020, new
customer additions and our disconnect rates on our residential monitored
security customers were typically higher during the second and third calendar
quarters of each year relative to the first and fourth quarters due to several
factors including the timing of household moves and the overall state of the
housing market. We believe the COVID-19 Pandemic affected these seasonal trends
beginning in 2020. During 2020, we experienced a lower volume of customer
relocations which was followed by a slight increase during 2021 as the number of
household moves increased. During 2022, we have seen favorable trends in gross
customer revenue attrition primarily as a result of a lower volume of customer
relocations, partially offset by an increase

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in non-payment disconnects. We are currently unable to determine whether there
will be any ongoing or further impacts on our seasonality, and we may continue
to experience fluctuations in these or other trends in the future.

We have not sought or requested government assistance as a result of the
COVID-19 Pandemic, but we did experience a favorable cash flow impact during
2020 and other benefits associated with certain income tax and payroll tax
provisions of the Coronavirus Aid, Relief, and Economic Security Act (the "CARES
Act"), including the deferral of remittance of certain 2020 payroll taxes. We
paid the majority of the first 50% of the deferred amount during the fourth
quarter of 2021, and expect to pay the remainder by January 2, 2023.

Strategic Partnerships

Google Commercial Agreement



In July 2020, we entered into a Master Supply, Distribution, and Marketing
Agreement with Google (the "Google Commercial Agreement"), pursuant to which
Google has agreed to supply us with certain Google devices as well as certain
Google video and analytics services ("Google Devices and Services") for sale to
our customers. Subject to customary termination rights related to breach and
change of control, the Google Commercial Agreement has an initial term of seven
years from the date that the Google Devices and Services are successfully
integrated into our end-user security and automation platform. Further, subject
to certain carve-outs, we have agreed to exclusively sell Google Devices and
Services to our customers.

In June 2022, we amended the Google Commercial Agreement to extend the date for
the launch of the integrated Google Devices and Services until September 30,
2022. As of September 30, 2022, Google has the contractual right to require us,
with certain exceptions, until such integration, to exclusively offer Google
Devices and Services without integration for all new professional installations
and for existing customers who do not have ADT Pulse or ADT Control interactive
services. We have already begun providing Google video services and devices, and
we will continue to do so on a non-integrated basis, as we work closely with
Google toward an integrated solution. We launched the Google Nest doorbell
during the first quarter of 2022, rolled out mesh Wi-Fi during the second
quarter of 2022, and launched Google indoor and outdoor cameras in the third
quarter of 2022.

The Google Commercial Agreement further specifies each party shall contribute
$150 million towards the joint marketing of devices and services; customer
acquisition; training of our employees on the sales, installation, customer
service, and maintenance of the product and service offerings; and technology
updates for products included in such offerings. Each party is required to
contribute such funds in three equal tranches, subject to the attainment of
certain milestones.

In August 2022, we entered into the Google Commercial Agreement Amendment,
pursuant to which Google has agreed to commit an additional $150 million to fund
growth, data and insights, product innovation and technology advancements,
customer acquisition, and marketing, as mutually agreed by us and Google. The
additional success funds will be funded in three equal tranches, subject to the
attainment of certain milestones.

Canopy Investment



In April 2022, together with Ford Motor Company ("Ford"), we formed a new
entity, SNTNL LLC ("Canopy"), which combines ADT's professional security
monitoring and Ford's AI-driven video camera technology, to help customers
strengthen the security of new and existing vehicles across various automotive
brands. ADT and Ford expect to invest approximately $100 million collectively
during the next three years, of which we will contribute 40%. We have
contributed approximately $11 million, which was part of the initial funding at
closing. In addition, we entered into several commercial agreements (the "Canopy
Commercial Agreements"), which are discussed in Note 5 "Equity Method
Investments."

State Farm Strategic Investment and Tender Offer



As discussed in Note 10 "Equity," in September 2022, we entered into a
Securities Purchase Agreement with State Farm Fire & Casualty Company ("State
Farm") (the "State Farm Securities Purchase Agreement"), pursuant to which we
agreed to issue and sell in a private placement to State Farm 133,333,333 shares
of our Common Stock (the "State Farm Shares") at a per share price of $9.00 for
an aggregate purchase price of $1.2 billion (the "State Farm Strategic
Investment").

Also, in September 2022, in connection with the State Farm Strategic Investment,
we commenced a tender offer to purchase up to 133,333,333 shares of our Common
Stock (including shares issued upon conversion of Class B Common Stock) (the
"Tender Shares") at a price of $9.00 per share (the "Tender Offer").

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Concurrently with the execution of the State Farm Securities Purchase Agreement,
(i) Apollo delivered to us a Tender and Support Agreement, pursuant to which
Apollo agreed to collectively tender (and not withdraw) no fewer than
133,333,333 shares of Common Stock in the Tender Offer (the "Apollo Support
Agreement") and (ii) Google delivered to us a Support Agreement, pursuant to
which Google agreed to not convert and tender any of its shares of Class B
Common Stock.

The Tender Offer is considered a contingent forward purchase contract (the "Forward Contract"), and we recorded changes in fair value of $158 million in other income (expense) during the three months ended September 30, 2022.



On October 13, 2022, we issued and sold the State Farm Shares at a per share
price of $9.00 and received $1.2 billion (the "Closing"). The Tender Offer
expired on October 20, 2022 (the "Tender Expiration Date"), and on October 26,
2022, we used proceeds from the State Farm Strategic Investment to repurchase an
aggregate of 133,333,333 shares of our Common Stock at a purchase price of $9.00
per share, subject to the terms and conditions described in the Offer to
Purchase dated September 12, 2022 (as amended from time to time, the "Offer to
Purchase"). The Tender Shares were subject to the "odd lot" priority and
proration provisions described in the Offer to Purchase as the Tender Offer was
substantially over-subscribed. No shares of Class B Common Stock were converted
and tendered in the Tender Offer.

After giving effect to the State Farm Strategic Investment and the Tender Offer, State Farm owned approximately 15% of the Company's issued and outstanding Common Stock (assuming conversion of Class B Common Stock).



The portion of our issued and outstanding Common Stock (assuming conversion of
Class B Common Stock) owned by Apollo prior and subsequent to the Tender Offer
was 67% and 55%, respectively.

Additionally, we entered into a Development Agreement with State Farm (the
"State Farm Development Agreement"), pursuant to which State Farm committed up
to $300 million to fund product and technology innovation, customer growth, and
marketing initiatives. Upon the Closing, we received $100 million of such
commitment from State Farm, which is restricted until we use the funds in
accordance with the State Farm Development Agreement. Our use of the funds is
also subject to approval by State Farm.

Radio Conversion Program



During 2019, we commenced a program to replace the 3G and Code-Division Multiple
Access ("CDMA") cellular equipment used in many of our security systems as a
result of the cellular network providers notifying us they will be retiring
their 3G and CDMA networks beginning in 2022. As of the start of the rolling 3G
sunset process in February 2022, we had converted substantially all of our
remaining 3G customers. Following the completion of the applicable network
sunset, for those customers who do not transition prior to or have not
transitioned since, the loss of signal to our security systems and certain
services we provide may impact our ability to bill and/or collect from these
customers in the future, which may impact our attrition. Until the cellular
network providers complete the applicable sunset processes, we cannot estimate
the impact of the conversion on our attrition rate.

We do not expect the remaining radio conversion costs and related incremental revenue to be material.



Tax Legislation

Delayed Effective Dates for Tax Law Changes under the Tax Cuts and Jobs Act



Certain changes to U.S. federal tax law included in the Tax Cuts and Jobs Act
had a delayed effective date and have taken effect for tax years beginning after
December 31, 2021. Under Internal Revenue Code ("IRC") Section 163(j), the
limitation on net business interest expense deductions will no longer be
increased by deductions for depreciation, amortization, or depletion. Under IRC
Section 174, specified research and experimentation expenditures must now be
capitalized and amortized. These items could result in increased taxable income
and acceleration of net operating loss utilization, which could impact our tax
expense and ultimately, our net income or loss.

Federal Tax Legislation



The Inflation Reduction Act (the "IRA") was signed into law in August 2022. The
IRA, among other provisions, implements (i) a 15% corporate alternative minimum
tax (the "CAMT") on book income for corporations whose average annual adjusted
financial statement income during the most recently completed three-year period
exceeds $1 billion, (ii) a 1% excise tax on net stock repurchases, and (iii)
several tax incentives to promote clean energy including an extension of the
Investment Tax Credit (the "ITC"). Both the CAMT and the excise tax provisions
are effective for tax years beginning after December 31, 2021. As of September
30, 2022, we do not anticipate any material impact in the short-term at this
time.

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Under the IRA, the ITC was extended until 2032 to allow a qualifying homeowner
to deduct 30% of the cost of installing residential solar systems from their
U.S. federal income taxes. Under the current terms, the ITC will remain at 30%
through the end of 2032 and be further reduced in increments down to 0.0% after
the end of 2034, unless extended. We believe this incentive will be favorable
for our Solar business.

Potential for Future Valuation Allowance



As discussed in our 2021 Annual Report, we had a significant amount of deferred
tax assets as of December 31, 2021, against which we take valuation allowances
that relate to the uncertainty of our ability to utilize these deferred tax
assets in future periods. These valuation allowances were not material in 2021.
We review periodically those matters that can influence our decision as to
whether or not a valuation allowance is appropriate. Among those matters
considered are pending and enacted legislation such as the updates described
above. We will consider each quarter whether any developments to such
legislation, together with the other factors we consider, require a valuation
allowance.

We believe that our deferred tax assets for disallowed interest under IRC
Section 163(j) will grow meaningfully during 2022 and in subsequent years from
their December 31, 2021 level. There is currently significant uncertainty in the
matters we consider when determining whether it is appropriate to take
additional valuation allowances. While we have not reported any material changes
to our valuation allowances as disclosed in our 2021 Annual Report, we may
determine to do so in subsequent periods. Any material change to our valuation
allowance would materially and adversely affect our operating results and may
result in a net loss position for any given period.

KEY PERFORMANCE INDICATORS



We evaluate our results using certain key performance indicators, including the
operating metrics recurring monthly revenue ("RMR") and gross customer revenue
attrition, as well as the non-GAAP measure Adjusted EBITDA. Computations of our
key performance indicators may not be comparable to other similarly titled
measures reported by other companies. Certain operating metrics are
approximated, as there may be variations to reported results due to certain
adjustments we might make in connection with the integration over several
periods of acquired companies that calculated these metrics differently or
periodic reassessments and refinements in the ordinary course of business,
including changes due to system conversions or historical methodology
differences in legacy systems.

Recurring Monthly Revenue

RMR is generated by contractual recurring fees for monitoring and other recurring services provided to our customers.

We use RMR to evaluate our overall sales, installation, and retention performance. Additionally, we believe the presentation of RMR is useful to investors because it measures the volume of revenue under contract at a given point in time. RMR is also a useful measure for forecasting future revenue performance as the majority of our revenue comes from recurring sources.

Gross Customer Revenue Attrition

Gross customer revenue attrition is defined as RMR lost as a result of customer attrition, net of dealer charge-backs and reinstated customers, excluding contracts monitored but not owned and DIY customers. Customer sites are considered canceled when all services are terminated. Dealer charge-backs represent customer cancellations charged back to the dealers because the customer canceled service during the charge-back period, which is generally thirteen months.



Gross customer revenue attrition is calculated on a trailing twelve-month basis,
the numerator of which is the RMR lost during the period due to attrition, net
of dealer charge-backs and reinstated customers, and the denominator of which is
total annualized RMR based on an average of RMR under contract at the beginning
of each month during the period, in each case, excluding contracts monitored but
not owned and DIY customers.

We use gross customer revenue attrition to evaluate our retention and customer
satisfaction performance, as well as evaluate subscriber trends by vintage year.
Additionally, we believe the presentation of gross customer revenue attrition is
useful to investors as it provides a means to evaluate drivers of customer
attrition and the impact of retention initiatives.

Adjusted EBITDA



We also disclose Adjusted EBITDA, which is a non-GAAP measure. Our definition of
Adjusted EBITDA, a reconciliation of Adjusted EBITDA to net income (loss) (the
most comparable GAAP measure), and additional information, including a
description of the limitations relating to the use of Adjusted EBITDA, are
provided under "-Non-GAAP Measures."

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RESULTS OF OPERATIONS



(in thousands, except as otherwise
indicated)                                            Three Months Ended September 30,                              Nine Months Ended September 30,
Results of Operations:                          2022                  2021              $ Change              2022                 2021              $ Change
Monitoring and related services            $  1,159,641          $ 

1,098,389 $ 61,252 $ 3,426,729 $ 3,244,675

     $ 182,054
Installation, product, and other                444,450              218,613            225,837            1,323,139              681,448            641,691
Total revenue                                 1,604,091            1,317,002            287,089            4,749,868            3,926,123            823,745
Cost of revenue (exclusive of
depreciation and amortization shown
separately below)                               494,321              371,985            122,336            1,511,902            1,134,736        

377,166


Selling, general, and administrative
expenses                                        480,427              448,634             31,793            1,449,844            1,343,872        

105,972


Depreciation and intangible asset
amortization                                    406,332              480,010            (73,678)           1,281,871            1,424,090        

(142,219)


Merger, restructuring, integration,
and other                                         6,285               (6,723)            13,008                2,968               18,588            (15,620)
Goodwill impairment                             149,385                    -            149,385              149,385                    -            149,385
Operating income (loss)                          67,341               23,096             44,245              353,898                4,837            349,061
Interest expense, net                           (30,084)            (133,275)           103,191             (118,042)            (347,524)           229,482
Loss on extinguishment of debt                        -              (36,957)            36,957                    -              (37,113)            37,113
Other income (expense)                         (156,116)               1,511           (157,627)            (153,157)               4,847           (158,004)
Income (loss) before income taxes
and equity in net earnings (losses)
of equity method investee                      (118,859)            (145,625)            26,766               82,699             (374,953)           457,652
Income tax benefit (expense)                     (1,534)              36,496            (38,030)             (58,982)              92,080           (151,062)
Income (loss) before equity in net
earnings (losses) of equity method
investee                                       (120,393)            (109,129)           (11,264)              23,717             (282,873)      

306,590


Equity in net earnings (losses) of
equity method investee                           (1,594)                   -             (1,594)              (2,542)                   -             (2,542)
Net income (loss)                          $   (121,987)         $  (109,129)         $ (12,858)         $    21,175          $  (282,873)         $ 304,048

Key Performance Indicators: (1)
RMR                                        $    372,070          $   

356,341 $ 15,729 $ 372,070 $ 356,341

   $  15,729
Gross customer revenue attrition
(percent)                                            12.6%                13.4%           N/A                     12.6%                13.4%           N/A
Adjusted EBITDA (2)                        $    619,941          $   554,310          $  65,631          $ 1,818,187          $ 1,638,306          $ 179,881


_______________________
(1)Refer to the "Key Performance Indicators" section for the definitions of
these key performance indicators.
(2)Adjusted EBITDA is a non-GAAP measure. Refer to the "Non-GAAP Measures"
section for the definition of this term and a reconciliation to the most
comparable GAAP measure.
N/A - Not applicable.

Monitoring and Related Services Revenue:



Monitoring and related services revenue ("M&S Revenue") is primarily comprised
of revenue generated from providing recurring monthly monitoring and other
services.

                                                          Three Months Ended September 30,                              Nine Months Ended September 30,
(in thousands)                                       2022                  2021             $ Change              2022                 2021              $ Change
CSB                                            $   1,021,811          $   975,810          $ 46,001          $ 3,026,281          $ 2,892,291          $ 133,990
Commercial                                           137,830              122,579            15,251              400,448              352,384             48,064
Total M&S Revenue(1)                           $   1,159,641          $ 1,098,389          $ 61,252          $ 3,426,729          $ 3,244,675          $ 182,054


_________________

(1) M&S Revenue is not applicable to our Solar segment.


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As of September 30, 2022, our ending RMR balance was $372 million, up $16 million or 4% compared to the prior year, primarily driven by our CSB segment.

The increases in M&S Revenue for the three and nine months ended September 30, 2022, as compared to the prior year periods, were driven by higher RMR and reflect:

•an increase in average revenue per subscriber of 3%, as new and existing customers selected higher priced interactive and other services, and

•an increase in our subscriber base of 2% primarily due to subscriber growth initiatives and improvements in customer retention.



Gross customer revenue attrition was 12.6% as of September 30, 2022 compared to
13.4% as of September 30, 2021. The improvement in gross customer revenue
attrition was driven by a decrease in relocations and fewer voluntary
disconnects primarily resulting from customer retention initiatives, partially
offset by higher non-payment disconnects.

CSB:



During the three and nine months ended September 30, 2022, the increases in CSB
M&S Revenue, as compared to the prior year periods, were primarily due to
increases in recurring revenue of $41 million and $116 million, respectively,
driven by the improvements in RMR described above.

Commercial:

For the three and nine months ended September 30, 2022, the increases in Commercial M&S Revenue, as compared to the prior year periods, included:

•increases in non-contracted service revenue of $12 million and $32 million, respectively, driven by higher revenue per service call, and

•increases in recurring revenue of $3 million and $16 million, respectively, driven by improvements in average revenue per subscriber.

Installation, Product, and Other Revenue:



Installation, product, and other revenue is comprised of revenue from the sale
and installation of security and solar systems, as well as the amortization of
deferred subscriber acquisition revenue primarily, in our CSB segment.

                                                      Three Months Ended September 30,                               Nine Months Ended September 30,
(in thousands)                                   2022                   2021             $ Change               2022                 2021             $ Change
CSB                                       $     88,829              $  59,790          $  29,039          $     235,437          $ 204,561          $  30,876
Commercial                                     176,468                158,823             17,645                501,513            476,887             24,626
Solar                                          179,153                      -            179,153                586,189                  -            586,189
Total installation, product, and
other revenue                             $    444,450              $ 218,613          $ 225,837          $   1,323,139          $ 681,448          $ 641,691


The increase in total installation, product, and other revenue for the three and
nine months ended September 30, 2022, as compared to the prior year periods, was
primarily due to revenue from Solar installations, as shown above, as a result
of the ADT Solar Acquisition in December 2021, and included a reduction of
approximately $30 million in the first quarter of 2022 from the amortization of
purchase accounting adjustments.

CSB:

For the three months ended September 30, 2022, the increase in CSB installation, product, and other revenue included:



•an increase in the amortization of deferred subscriber acquisition revenue of
$19 million due to an increase in ADT-owned transactions since the prior year
period, and

•an increase in installation revenue on outright sales of $10 million primarily related to the sale of certain products in connection with our Google partnership.


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For the nine months ended September 30, 2022, the increase in CSB installation, product, and other revenue included:



•an increase in the amortization of deferred subscriber acquisition revenue of
$52 million due to an increase in ADT-owned transactions since the prior year
period, partially offset by

•a net decrease in installation revenue of $21 million primarily driven by a
lower volume of outright sales as a result of our transition to a predominately
company-owned model in the first quarter of 2021.

Commercial:

For the three and nine months ended September 30, 2022, the increase in installation, product, and other revenue was primarily due to higher installation revenue of $17 million and $24 million, respectively, related to strong sales performance, despite supply chain delays.

Cost of Revenue:



Cost of revenue is primarily comprised of costs related to the installation of
our security and solar systems, as well as field service and call center costs
in our CSB and Commercial segments.

                                                           Three Months Ended September 30,                               Nine Months Ended September 30,
(in thousands)                                        2022                   2021             $ Change              2022                 2021              $ Change
CSB                                            $    163,383              $ 172,483          $  (9,100)         $   505,767          $   553,620          $ (47,853)
Commercial                                          216,702                199,502             17,200              623,590              581,116             42,474
Solar                                               114,236                      -            114,236              382,545                    -            382,545
Total cost of revenue                          $    494,321              $ 371,985          $ 122,336          $ 1,511,902          $ 1,134,736          $ 377,166

The increase in total cost of revenue for the three and nine months ended September 30, 2022, as compared to the prior year periods, was primarily due to higher installation costs, as shown above, as a result of the ADT Solar Acquisition in December 2021.

CSB:

For the three months ended September 30, 2022, the decrease in CSB cost of revenue included:



•a decrease in field service and call center costs of $14 million, as compared
to the prior year period, primarily driven by a lower volume of in-person
service tickets as a result of cost savings initiatives such as our Virtual
Assistance Program implemented in July 2021, despite rising costs and providing
service to a larger number of customers, including a higher mix of interactive
services, partially offset by

•an increase in installation costs of $5 million, as compared to the prior year period, due to a higher volume of outright sales transactions.

For the nine months ended September 30, 2022, the decrease in CSB cost of revenue included:



•a decrease in field service and call center costs of $27 million, as compared
to the prior year period, primarily driven by a lower volume of in-person
service tickets as a result of our Virtual Assistance Program described above,
and

•a decrease in installation costs of $21 million, as compared to the prior year period, due to a lower volume of outright sales transactions.

Commercial:

For the three months ended September 30, 2022, the increase in Commercial cost of revenue included:

•an increase in installation costs of $11 million, and

•an increase in field service costs of $6 million.

For the nine months ended September 30, 2022, the increase in Commercial cost of revenue included:

•an increase in field service costs of $32 million, and

•an increase in installation costs of $11 million.


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These increases were primarily attributable to an increase in installations and services performed in connection with strong sales performance as discussed above and reflect higher prices for materials, labor, and fuel.

Selling, General, and Administrative Expenses:

For the three and nine months ended September 30, 2022, the increases in selling, general, and administrative expenses ("SG&A"), as compared to the prior year periods, were primarily driven by:

•incremental expenses of approximately $71 million and $244 million, respectively, as a result of the ADT Solar Acquisition in December 2021,

•an increase in selling costs (excluding ADT Solar) of approximately $18 million and $39 million, respectively, primarily due to additional amortization of deferred subscriber acquisition costs, and



•increases in the provision for credit losses (excluding ADT Solar) of
approximately $14 million and $33 million, respectively, primarily in our CSB
segment due to lower provision in the prior year associated with impacts from
the COVID-19 Pandemic.

These increases were partially offset by:

•decreases in radio conversion costs of $59 million and $173 million, respectively, primarily due to a decrease in the number of conversions, and



•decreases in advertising costs (excluding ADT Solar) of approximately $29
million and $67 million, respectively, primarily due to our efforts to optimize
our advertising model in our CSB segment.

Depreciation and Intangible Asset Amortization:

For the three and nine months ended September 30, 2022, the decrease in depreciation and intangible asset amortization, as compared to the prior year periods, was primarily driven by:

•decreases in the amortization of customer relationship intangible assets of $100 million and $218 million, respectively.



The decrease in the amortization of customer relationship intangible assets was
primarily due to certain assets acquired as part of the acquisition of The ADT
Security Corporation in 2016 (the "ADT Acquisition") becoming fully amortized
beginning with the fourth quarter of 2021. The remaining customer relationship
intangible assets acquired as part of the ADT Acquisition will be fully
amortized during 2023.

These decreases were partially offset by investments in subscriber growth resulting in:

•increases in the amortization of customer contracts acquired under our authorized dealer program and from other third parties of $14 million and $41 million, respectively, and

•increases in the depreciation of subscriber system assets of $10 million and $34 million, respectively.

Merger, Restructuring, Integration, and Other:



During the nine months ended September 30, 2021, merger, restructuring,
integration, and other primarily included an $18 million impairment charge in
CSB due to lower than expected benefits from our developed-technology intangible
asset acquired during November 2020.

Goodwill Impairment:



For the three and nine months ended September 30, 2022, we recorded a goodwill
impairment charge of $149 million associated with our Solar reporting unit,
which was the result of an interim impairment analysis performed. Refer to Note
6 "Goodwill and Other Intangible Assets" for further discussion.

Interest Expense, net:



For the three and nine months ended September 30, 2022, the decrease in interest
expense, net was driven by higher unrealized gains of $85 million and $198
million, respectively, related to interest rate swap contracts not designated as
cash flow hedges primarily due to fluctuations in the forward London Interbank
Offered Rate ("LIBOR"). Refer to Note 8 "Derivative Financial Instruments" for
additional information.

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Loss on Extinguishment of Debt:

During the three and nine months ended September 30, 2021, loss on extinguishment of debt of $37 million was related to the call premium and write-off of unamortized fair value adjustments in connection with the $1.0 billion redemption of the 3.50% notes due 2022 ("ADT Notes due 2022") in August 2021 ("ADT Notes due 2022 Redemption").

Other Income (Expense):



For the three and nine months ended September 30, 2022, other income (expense)
primarily included the change in fair value of the Forward Contract related to
the Tender Offer of $158 million. In the fourth quarter of 2022, we expect to
recognize a gain of approximately $95 million as a result of further adjustments
to the fair value of the Forward Contract. Refer to Note 10 "Equity" for
additional information.

Income Tax Benefit (Expense):

The effective tax rate can vary from period to period due to permanent tax adjustments, discrete items such as the settlement of income tax audits and changes in tax laws, as well as recurring factors such as changes in the overall state tax rate.



The Company's income tax expense for the three months ended September 30, 2022
was $2 million, resulting in an effective tax rate for the period of (1.3)%. The
effective tax rate primarily represents the federal statutory rate of 21.0% plus
a state statutory tax rate, net of federal benefits, of 6.5%, favorable impacts
from research and development ("R&D") credits and other items, partially offset
by an unfavorable impact related to the fair value adjustment of the Forward
Contract.

The Company's income tax benefit for the three months ended September 30, 2021
was $36 million, resulting in an effective tax rate for the period of 25.1%. The
effective tax rate primarily represents the federal statutory rate of 21.0% and
a state statutory tax rate, net of federal benefits, of 3.1%.

The Company's income tax expense for the nine months ended September 30, 2022
was $59 million, resulting in an effective tax rate for the period of 71.3%. The
effective tax rate primarily represents the federal statutory rate of 21.0%, a
state statutory tax rate, net of federal benefits, of 5.0%, unfavorable impacts
related to the fair value adjustment of the Forward Contract and other items,
partially offset by favorable impacts from R&D credits and other items.

The Company's income tax benefit for the nine months ended September 30, 2021
was $92 million, resulting in an effective tax rate for the period of 24.6%. The
effective tax rate primarily represents the federal statutory tax rate of 21.0%,
a state statutory tax rate, net of federal benefits, of 2.9%, and a 0.6%
favorable impact of share-based compensation.

NON-GAAP MEASURES



To provide investors with additional information in connection with our results
as determined in accordance with GAAP, we disclose Adjusted EBITDA as a non-GAAP
measure. This measure is not a financial measure calculated in accordance with
GAAP, and it should not be considered as a substitute for net income, operating
income, or any other measure calculated in accordance with GAAP, and may not be
comparable to similarly titled measures reported by other companies.

Adjusted EBITDA



We believe Adjusted EBITDA is useful to investors to measure the operational
strength and performance of our business. We believe the presentation of
Adjusted EBITDA is useful as it provides investors additional information about
our operating profitability adjusted for certain non-cash items, non-routine
items we do not expect to continue at the same level in the future, as well as
other items not core to our operations. Further, we believe Adjusted EBITDA
provides a meaningful measure of operating profitability because we use it for
evaluating our business performance, making budgeting decisions, and comparing
our performance against other peer companies using similar measures.

We define Adjusted EBITDA as net income or loss adjusted for (i) interest; (ii)
taxes; (iii) depreciation and amortization, including depreciation of subscriber
system assets and other fixed assets and amortization of dealer and other
intangible assets; (iv) amortization of deferred costs and deferred revenue
associated with subscriber acquisitions; (v) share-based compensation expense;
(vi) merger, restructuring, integration, and other; (vii) losses on
extinguishment of debt; (viii) radio conversion costs, net; and (ix) other
income/gain or expense/loss items such as changes in fair value of certain
financial instruments, impairment charges, financing and consent fees, or
acquisition-related adjustments.

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There are material limitations to using Adjusted EBITDA. Adjusted EBITDA does
not take into account certain significant items, including depreciation and
amortization, interest, taxes, and other adjustments which directly affect our
net income (loss). These limitations are best addressed by considering the
economic effects of the excluded items independently and by considering Adjusted
EBITDA in conjunction with net income or loss as calculated in accordance with
GAAP.

The table below reconciles Adjusted EBITDA to net income (loss):



                                                 Three Months Ended September 30,                              Nine Months Ended September 30,
(in thousands)                             2022                  2021              $ Change              2022                 2021              $ Change
Net income (loss)                    $   (121,987)           $ (109,129)         $ (12,858)         $    21,175          $  (282,873)         $ 304,048
Interest expense, net                      30,084               133,275           (103,191)             118,042              347,524           (229,482)
Income tax expense (benefit)                1,534               (36,496)            38,030               58,982              (92,080)           151,062
Depreciation and intangible asset
amortization                              406,332               480,010            (73,678)           1,281,871            1,424,090           

(142,219)


Amortization of deferred subscriber
acquisition costs                          42,244                32,534              9,710              118,233               91,364             26,869
Amortization of deferred subscriber
acquisition revenue                       (63,796)              (45,020)           (18,776)            (175,680)            (122,908)           

(52,772)


Share-based compensation expense           16,692                16,242                450               49,644               45,848              3,796
Merger, restructuring, integration,
and other                                   6,285                (6,723)            13,008                2,968               18,588            (15,620)
Goodwill impairment(1)                    149,385                     -            149,385              149,385                    -            149,385
Loss on extinguishment of debt                  -                36,957            (36,957)                   -               37,113            

(37,113)


Change in fair value of financial
instruments(2)                            157,550                     -            157,550              157,550                    -            157,550
Radio conversion costs, net                (4,078)               52,295            (56,373)               6,406              171,659           

(165,253)


Acquisition related adjustments(3)         (1,226)                1,526             (2,752)              36,397                1,049             35,348
Other(4)                                      922                (1,161)             2,083               (6,786)              (1,068)            (5,718)
Adjusted EBITDA                      $    619,941            $  554,310          $  65,631          $ 1,818,187          $ 1,638,306          $ 179,881


________________
(1)  Represents an impairment charge associated with our Solar reporting unit.
Refer to Note 6 "Goodwill and Other Intangible Assets."
(2)  Represents the change in fair value of the Forward Contract. Refer to Note
10 "Equity."
(3)  During 2022, primarily represents the amortization of the customer backlog
intangible asset acquired in the ADT Solar Acquisition, which was fully
amortized as of March 2022.
(4)  During 2022, primarily represents the gain on sale of a business.

Adjusted EBITDA in total and by segment are set forth below. As noted above, Adjusted EBITDA is our segment profit measure pursuant to U.S. GAAP and is therefore not a non-GAAP financial measure with respect to our segments.



                                         Three Months Ended September 30,                               Nine Months Ended September 30,
(in thousands)                       2022                   2021            $ Change              2022                 2021              $ Change
CSB                          $    592,107               $ 528,680          $ 63,427          $ 1,733,353          $ 1,558,055          $ 175,298
Commercial                         34,310                  25,630             8,680               89,303               80,251              9,052
Solar                              (6,476)                      -            (6,476)              (4,469)                   -             (4,469)
Adjusted EBITDA              $    619,941               $ 554,310          $ 65,631          $ 1,818,187          $ 1,638,306          $ 179,881

The drivers listed below exclude amounts that are outside of our definition of Adjusted EBITDA.

Refer to the discussions above under "-Results of Operations" for further details.

CSB:

For the three and nine months ended September 30, 2022, respectively, the increases were primarily due to:

•higher M&S Revenue of $48 million and $141 million,

•lower advertising costs of $29 million and $69 million, and

•lower field service and call center costs of $14 million and $27 million.


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The increases were partially offset, respectively, by:

•higher selling and general and administrative expenses of $20 million and $34 million, and

•higher provision for credit losses of $11 million and $27 million.

Commercial:

For the three and nine months ended September 30, 2022, respectively, the increase was primarily due to:

•higher M&S Revenue of $15 million and $48 million and

•higher installation revenue, net of the associated installation costs of $6 million and $13 million, partially offset by

•higher field service and call center costs of $6 million and $32 million, and

•higher provision for credit losses of $4 million and $6 million.

The remainder was primarily due to higher selling, general and administrative expenses.



Solar:

Solar Adjusted EBITDA for the nine months ended September 30, 2022 includes $11
million of charges in the second quarter associated with the estimated amount of
receivables and rebates that are not expected to be collected from a former
third-party lender that provided loan products for our Solar customers due to
this third-party lender entering a formal insolvency proceeding to effectuate
the wind-down of its operations.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and capital resources primarily consisted of the following:



                                                                             September 30,
(in thousands)                                                                    2022
Cash and cash equivalents                                                   $      45,734
Availability under First Lien Revolving Credit Facility                     $     575,000
Uncommitted available borrowing capacity under Receivables Facility         $      70,345
Carrying amount of total debt outstanding                                   $   9,803,060


Liquidity

We expect our ongoing sources of liquidity to include cash generated from
operations, borrowings under our first lien revolving credit facility (the
"First Lien Revolving Credit Facility") and our uncommitted receivables
securitization financing agreement (the "Receivables Facility"), and the
issuance of equity and/or debt securities as appropriate given market
conditions. Our future cash needs are expected to include cash for operating
activities, working capital, capital expenditures, strategic investments,
periodic principal and interest payments on our debt, and potential dividend
payments to our stockholders.

We are a highly leveraged company with significant debt service requirements and
have both fixed-rate and variable-rate debt. We may periodically seek to repay,
redeem, repurchase, or refinance our indebtedness, or seek to retire or purchase
our outstanding securities through cash purchases in the open market, privately
negotiated transactions, a 10b5-1 repurchase plan, or otherwise, and any such
transactions may involve material amounts. Cash outflows for interest payments
are not consistent between quarters, with larger outflows occurring in the first
and third quarters, and may vary as a result of our variable rate debt.

Certain of our variable rate debt instruments are currently based on LIBOR. The
Secured Overnight Financing Rate ("SOFR") will replace the forward LIBOR as the
applicable benchmark rate for all existing and future issuances of our debt
instruments with a variable rate component (the "SOFR Transition") by June 2023
(the "SOFR Transition Date"). Existing instruments under the First Lien Credit
Agreement will continue to be based on LIBOR until the SOFR Transition Date.
However, any modification, such as a repricing, or any new debt issuances with a
variable rate component, will utilize SOFR per the terms of the First Lien
Credit Agreement. As of September 30, 2022, we do not anticipate any material
impacts from the SOFR Transition.

We are closely monitoring the impact of recent inflationary pressures and
changes in interest rates on our cash position. However, we believe our cash
position, borrowing capacity available under our First Lien Revolving Credit
Facility and Receivables Facility, and cash provided by operating activities
are, and will continue to be, adequate to meet our operational and business
needs in the next twelve months, as well as our long-term liquidity needs.

                                       46
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Material Cash Requirements



There have been no significant changes to our short-term or long-term material
cash requirements, or our commitments and contractual obligations from those
disclosed in our 2021 Annual Report, except as discussed below:

Customer Account Purchases



In 2021, we entered into agreements for potential future customer account
purchases from two distinct third parties, assuming certain conditions are met,
over the course of those agreements. As of September 30, 2022, the remaining
commitments for those potential future customer account purchases were not
material.

Off-Balance Sheet Arrangements



During the nine months ended September 30, 2022, there have been no material
changes to our off-balance sheet arrangements as disclosed in our 2021 Annual
Report, except as discussed below:

During March 2022, we entered into an unsecured Credit Agreement with Goldman
Sachs Mortgage Company, as administrative agent and issuing lender (the "Issuing
Lender"), together with other lenders party thereto, pursuant to which we may
request the Issuing Lender to issue one or more letters of credit for its own
account or the account of its subsidiaries, in an aggregate face amount not to
exceed $75 million at any one time.

Long-Term Debt

There have been no material changes to our long-term debt from those disclosed in our 2021 Annual Report, except as discussed below.

Refer to Note 7 "Debt" for further discussion on our debt agreements.

First Lien Revolving Credit Facility

During the nine months ended September 30, 2022, we borrowed $480 million and repaid $505 million, and as of September 30, 2022, we had no outstanding borrowings.

Term Loan A Facility



In September 2022, we entered into a debt commitment letter with various banks
to provide up to an aggregate principal amount of $600 million of term loans
under a senior secured term loan A facility (the "Term Loan A Facility") on or
before March 15, 2023 (the "Commitment Termination Date") under a term loan
credit agreement (the "Term Loan A Credit Agreement").

We may execute the Term Loan A Credit Agreement and incur indebtedness under the
Term Loan A Facility, or at our option, terminate the commitments at any time
prior to the Commitment Termination Date. The proceeds of any borrowings under
the Term Loan A Facility are required to be used to redeem a portion of the ADT
Notes due 2023 (as discussed below) and pay related fees and expenses.

As of September 30, 2022, we have not incurred indebtedness under the Term Loan A Facility.



Receivables Facility

In May 2022, we amended the Receivables Facility to change the benchmark rate
from 1-month LIBOR to Daily SOFR. In addition, the May 2022 amendment extended
the scheduled termination date for the uncommitted revolving period from October
2022 to May 2023, and amended certain other terms to increase the advance rate
on pledged collateral.

During the nine months ended September 30, 2022, we received proceeds of $212
million and repaid $81 million, and as of September 30, 2022, the Receivables
Facility had an outstanding balance of $330 million. We are currently evaluating
options for increasing our available borrowing capacity under the Receivables
Facility.

                                       47
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ADT Notes due 2023



As of September 30, 2022, we had an outstanding balance of $700 million under
our senior notes due 2023 (the "ADT Notes due 2023") that was classified as a
current liability, net of any unamortized discount. We intend to use the
proceeds from the issuance of the Term Loan A Facility to redeem a portion of
the ADT Notes due 2023 during the first quarter of 2023 and redeem the remaining
outstanding balance upon maturity, in both instances including the payment of
related expenses, using available cash.

Debt Covenants



As of September 30, 2022, we were in compliance with all financial covenant and
other maintenance tests for all our debt obligations. We do not believe there is
a material risk of future noncompliance with our financial covenant and other
maintenance tests as a result of the COVID-19 Pandemic, or otherwise.

Dividends



During the nine months ended September 30, 2022 and 2021, we declared aggregate
dividends of $90 million ($0.035 per share) and $82 million ($0.035 per share)
on our Common Stock, respectively, and $6 million ($0.035 per share) on our
Class B Common Stock during both periods.

On November 3, 2022, we announced a dividend of $0.035 per share to holders of
Common Stock and Class B Common Stock of record on December 15, 2022, which will
be distributed on January 4, 2023.

Cash Flow Analysis

                                                                    Nine Months Ended September 30,
(in thousands)                                               2022                  2021               $ Change

Net cash provided by (used in) operating activities $ 1,321,069

   $  1,155,353          $ 165,716
Net cash provided by (used in) investing activities     $ (1,208,790)         $ (1,170,649)         $ (38,141)
Net cash provided by (used in) financing activities     $    (85,772)

$ (124,081) $ 38,309

Cash Flows from Operating Activities

The increase in cash provided by operating activities was primarily due to:

•a decrease in payments related to radio conversion costs, net of the related incremental revenue, of $162 million, partially offset by

•an increase in payments related to our annual incentive compensation plan of $49 million due to a partial payment in the prior year, and

•timing of payments to and receipts from vendors primarily related to accounts payable and inventory.

The remainder of the activity related to changes in assets and liabilities due to the volume and timing of other operating cash receipts and payments with respect to when the transactions are reflected in earnings.

Refer to the discussions above under "-Results of Operations" for further details.

Cash Flows from Investing Activities

During the nine months ended September 30, 2022, the increase in cash flows used in investing activities as compared to the prior year primarily consisted of:

•an increase in net outflows of $54 million related to subscriber system assets expenditures as a result of more Company-owned transactions and our growth initiatives, as well as

•cash paid of $11 million related to our initial investment in Canopy during 2022, partially offset by

•proceeds of $27 million related to disposal activities during 2022.


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Cash Flows from Financing Activities

During the nine months ended September 30, 2022, net cash used in financing activities primarily consisted of:

•dividends on common stock of $95 million,



•net repayments of long-term borrowings of $48 million, which primarily included
net payments of $25 million on our First Lien Revolving Credit Facility and $21
million of quarterly principal payments on our First Lien Term Loan due 2026,

•payments related to finance leases of $34 million, and

•payments related to interest rate swap contracts that included an other-than-insignificant financing element at inception of $27 million, partially offset by

•net proceeds of $131 million under the Receivables Facility

During the nine months ended September 30, 2021, net cash used in financing activities primarily consisted of:

•dividends on common stock of $87 million,



•net repayments of long-term borrowings of $41 million, which included $28
million in call premiums and $14 million of quarterly principal payments on our
First Lien Term Loan due 2026.

•payments related to interest rate swap contracts that included an other-than-insignificant financing element at inception of $42 million, as well as

•payments related to finance leases of $23 million, partially offset by

•net proceeds under the Receivables Facility of $90 million.

CRITICAL ACCOUNTING ESTIMATES



We disclosed our critical accounting estimates in our 2021 Annual Report, which
include estimates prepared in accordance with GAAP that involve a significant
level of estimation uncertainty and have had or are reasonably likely to have a
material impact on the financial condition or results of operations.

Critical accounting estimates are based on, among other things, estimates,
assumptions, and judgments made by management that include inherent risks and
uncertainties. Our estimates are based on relevant information available at the
end of each period. Actual results could differ materially from these estimates
under different assumptions or market conditions.

There were no material changes in our critical accounting estimates to that disclosed in our 2021 Annual Report, except as discussed below:

Goodwill Impairment



We perform our annual goodwill impairment test on October 1 of each year or more
often if events occur or circumstances change which indicate it is
more-likely-than-not that the fair value of a reporting unit is less than its
carrying amount. Under a quantitative approach, we estimate the fair value of a
reporting unit and compare it to the reporting unit's carrying amount. If the
carrying amount of a reporting unit exceeds its fair value, an impairment loss
is recognized in an amount equal to that excess.

As disclosed in our 2021 Annual Report, we acquired ADT Solar in December 2021
and assigned the goodwill to our newly created Solar reporting unit at the time
of acquisition. During the third quarter of 2022, as a result of ADT Solar's
recent underperformance of operating results in successive quarters relative to
expectations, as well as current macroeconomic conditions, including the impact
of the Federal Reserve further increasing the risk-free interest rate, we
performed an interim impairment quantitative assessment on our Solar reporting
unit as of September 30, 2022.

We estimated the fair value of the Solar reporting unit using the income
approach, which included significant assumptions such as forecasted revenue,
Adjusted EBITDA margins, and discount rates, as well as other assumptions
including operating expenses and cash flows. In developing these assumptions, we
relied on various factors including operating results, business plans, economic
projections, anticipated future cash flows, and other market data. Examples of
events or circumstances that could reasonably be expected to negatively affect
the underlying judgments and factors may include such items as a prolonged
downturn in the business environment, changes in economic conditions that
significantly differ from our assumptions in timing or degree, volatility in
equity and debt markets resulting in higher discount rates, and unexpected
regulatory changes. There are inherent uncertainties related to these judgments
and factors that may ultimately impact the estimated fair value determinations.

                                       49
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Based on the results of our interim impairment analysis, we recorded a non-cash
impairment charge of $149 million in the Condensed Consolidated Statements of
Operations during the third quarter of 2022. Following the impairment loss, the
remaining balance of goodwill attributable to our Solar reporting unit is
approximately $561 million.

As the carrying value of the Solar reporting unit approximates its fair value
following the impairment charge, the Solar reporting unit is considered at risk
of future impairment. If our assumptions are not realized, or if there are
future changes in any of the assumptions due to a change in economic conditions
or otherwise, it is possible that a further impairment charge may need to be
recorded in the future.

Refer to Note 6 "Goodwill and Other Intangible Assets" to the condensed consolidated financial statements for further discussion.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS



This Quarterly Report on Form 10-Q contains certain information that may
constitute "forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995 and are made in reliance on the safe
harbor protections provided thereunder. While we have specifically identified
certain information as being forward-looking in the context of its presentation,
we caution you that all statements contained in this report that are not clearly
historical in nature, including statements regarding the strategic investment by
and long term partnership with State Farm; anticipated financial performance;
management's plans and objectives for future operations; the successful
development, commercialization, and timing of new or joint products; expected
timing of product commercialization with State Farm or any changes thereto; our
acquisition of ADT Solar and its anticipated impact on our business and
financial condition; business prospects; outcomes of regulatory proceedings;
market conditions; our ability to successfully respond to the challenges posed
by the COVID-19 Pandemic; our strategic partnership and ongoing relationship
with Google; the expected timing of product commercialization with Google or any
changes thereto; the successful internal development, commercialization, and
timing of our next generation platform and innovative offerings; the successful
commercialization of our joint venture with Ford; the successful conversion of
customers who continue to utilize 3G services; the current and future market
size for existing, new, or joint products; any stated or implied outcomes with
regards to the foregoing; and other matters are forward-looking. Forward-looking
statements are contained principally in the sections of this report entitled
"Risk Factors" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations." Without limiting the generality of the preceding
sentences, any time we use the words "expects," "intends," "will,"
"anticipates," "believes," "confident," "continue," "propose," "seeks," "could,"
"may," "should," "estimates," "forecasts," "might," "goals," "objectives,"
"targets," "planned," "projects," and, in each case, their negative or other
various or comparable terminology, and similar expressions, we intend to clearly
express that the information deals with possible future events and is
forward-looking in nature. However, the absence of these words or similar
expressions does not mean that a statement is not forward-looking. For ADT,
particular uncertainties that could cause our actual results to be materially
different than those expressed in our forward-looking statements include,
without limitation:

•our ability to effectively implement our strategic partnership with,
commercialize products with, or utilize any of the amounts invested in us by
State Farm or provided by State Farm for R&D or other purposes;
•our ability to keep pace with rapid technological changes, including the
development of our next-generation platform, and industry changes;
•our ability to effectively implement our strategic partnership with or utilize
any of the amounts invested in us by Google;
•the impact of the COVID-19 pandemic on our employees, our customers, our
suppliers and our ability to carry on our normal operations;
•the impact of supply chain disruptions;
•our ability to maintain and grow our existing customer base;
•our ability to sell our products and services or launch new products and
services in highly competitive markets, including the home security and
automation market, the commercial fire and security markets, and the solar
market, and to achieve market acceptance with acceptable margins;
•our ability to successfully upgrade obsolete equipment installed at our
customers' premises in an efficient and cost-effective manner;
•changes in law, economic and financial conditions, including tax law changes,
changes to privacy requirements, changes to telemarketing, email marketing and
similar consumer protection laws, interest volatility, and trade tariffs and
restrictions applicable to the products we sell;
•any material change to the valuation allowances we take with respect to our
deferred tax assets;
•the impact of potential information technology, cybersecurity or data security
breaches;
•our dependence on third-party providers, suppliers, and dealers to enable us to
produce and distribute our products and services in a cost-effective manner that
protects our brand;
•our ability to successfully implement an equipment ownership model that best
satisfies the needs of our customers and to successfully implement and maintain
our receivables securitization financing agreement or similar arrangements;
•our ability to successfully pursue alternate business opportunities and
strategies;

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•our ability to integrate various companies we have acquired in an efficient and
cost-effective manner;
•the amount and timing of our cash flows and earnings, which may be impacted by
customer, competitive, supplier and other dynamics and conditions;
•our ability to maintain or improve margins through business efficiencies;
•and the other factors that are described in this report under the heading "Risk
Factors."

Forward-looking statements and information involve risks, uncertainties, and
other factors that could cause actual results to differ materially from those
expressed or implied in, or reasonably inferred from, such statements, including
without limitation, the risks and uncertainties disclosed or referenced under
the heading "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form
10-Q and in Part I, Item 1A in our 2021 Annual Report. Therefore, caution should
be taken not to place undue reliance on any such forward-looking statements.
Much of the information in this report that looks toward future performance is
based on various factors and important assumptions about future events that may
or may not actually occur. As a result, our operations and financial results in
the future could differ materially and substantially from those we have
discussed in the forward-looking statements included in this Quarterly Report on
Form 10-Q. We assume no obligation (and specifically disclaim any such
obligation) to publicly update or revise any forward-looking statements, whether
as a result of new information, future events, or otherwise, except as required
by law.

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